Analysts are bullish on bitcoinâ€™s price but the options market is decidedly bearish on the remaining weeks of 2020. Ethereumâ€™s wrapped bitcoin token crosses $2 billion locked.
- Bitcoin (BTC) trading around $16,240 as of 21:00 UTC (4 p.m. ET). Gaining 0.30% over the previous 24 hours.
- Bitcoinâ€™s 24-hour range: $15,971-$16,487
- BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.
Bitcoinâ€™s price trended up for the third straight day, hitting as high as $16,487, according to data from CoinDesk 20. It dipped somewhat since hitting that level and traded at $16,240 as of press time.Â
â€œBitcoin rose significantly above the $16,100 mark. Buyers pushed the price due to the large volume,â€ noted Constantin Kogan, managing partner at investment firm Wave Financial.Â
Major exchange daily spot volumes on Friday were at $668 million as of press time, but not close to Thursdayâ€™s $1.1 billion in volume.
George McDonaugh, managing director at investment firm KR1, highlighted a key difference between the price run-up in 2020 versus the mooning that occurred back in 2017. â€œBitcoin has spent 0.32% of its life at $16,000 and above, which means there were relatively very few buyers at that level back in 2017,â€ he told CoinDesk. â€œThis correlates to there being very few sellers at this level now, meaning there isnâ€™t a strong resistance band for the bulls to push the price higher.â€
â€œIâ€™m seeing an increasing demand from more traditional family offices making their first investments into bitcoin as a long-term hedge or as insurance for their existing portfolio of investments,â€ Michael Gord, chief executive officer of Global Digital Assets, told CoinDesk. â€œI expect this trend to continue as bitcoin keeps maintaining its value and being uncorrelated to most other asset classes.â€Â
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Bitcoin isnâ€™t entirely uncorrelated from other asset classes like equities, but lately the correlation between the worldâ€™s oldest cryptocurrency and the S&P 500 has dropped a little bit.
KR1â€™s McDonaugh is expecting bitcoinâ€™s price to reach $20,000, but it might take some time to get there as some profit-taking is likely to ensue. â€œ$20,000 is a far more psychological barrier, so it is likely to be â€˜HODLersâ€™ â€“ people holding bitcoin forever â€“ that may de-risk at that level and produce some selling pressure,â€ he said.Â
Bitcoin options traders arenâ€™t fully convinced that it will trade at $20,000 in 2020. The probabilities calculated using December expiration have pegged only a 16% chance of $20,000 bitcoin, a 29% for $18,000 and a 39% of $17,000 according to data aggregator Skew.
Nevertheless, analysts project that bitcoin can soon surpass at least $16,500 consistently. â€œGiven market sentiment and current trends, I am still bullish on BTC,â€ said Andrew Tu, an executive at trading firm Efficient Frontier. â€œThough we may range between $16,000 and $16,500 for a bit before breaking resistance.â€
Wrapped bitcoin hits $2 billion locked
Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Friday, trading around $470 and climbing 2.6% in 24 hours as of 21:00 UTC (4:00 p.m. ET).
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The amount of bitcoin â€œlockedâ€ in the Ethereum-based wrapped bitcoin contract passed $2 billion Thursday, and is staying at that level Friday. In order to use bitcoin on Ethereum, it must be â€œwrappedâ€ and used as a token on the network using a standard called ERC-20.
Brian Mosoff, chief executive officer of investment firm Ether Capital, says the parking of bitcoin on Ethereum is giving the network a huge leg up over its up-and-coming smart contract competitors, including Polkadot, Cardano and Cosmos, among others.
â€œItâ€™s proving that Ethereum is the thing everyone is plugging into and (networks like) Polkadot may not have its day in the sun,â€ Mosoff told CoinDesk.
Digital assets on the CoinDesk 20 are mostly green Friday. Notable winners as of 21:00 UTC (4:00 p.m. ET):
- litecoin (LTC) + 10.4%
- kyber network (KNC) + 7.3%
- eos (EOS) + 5.6%
- bitcoin cash (BCH) – 0.27%
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- The Nikkei 225 ended the day in the red 0.53%, led lower by investor concern about rising coronavirus cases and a sell-off in Trend Micro, which fell 7%.
- Europeâ€™s FTSE 100 slipped 0.36% as a stronger British pound, which negatively affects multinational corporationsâ€™ overseas revenue, dragged the index lower.
- In the United States the S&P climbed 1.5% as traders placed strategic bets on the possibility a coronavirus vaccine will eventually lift the economy.
- Oil was down 1.7%. Price per barrel of West Texas Intermediate crude: $40.21.
- Gold was in the green 0.60% and at $1,888 as of press time.
- The 10-year U.S. Treasury bond yield climbed Friday jumping to 0.896 and in the green 2%.